Stories indexed with the term ‘state shared revenue’

Editor’s note: On Jan. 31, the city council will begin a series of workshops on next year’s budget. The most recent status update from the city’s CFO, Tom Crawford, is that the city faces a $2.4 million shortfall if it does not reduce expenses. That figure assumes: (1) The city will receive around $2 million in parking revenue from the Ann Arbor Downtown Development Authority; (2) shared sales tax revenue from the state will continue at the same levels as last year; and (3) unresolved labor contracts will settle in a way that results in no increases to the wage structure, plus additional reductions equivalent to the cost savings the city would see if all employees were on the new health care plan.

The council has already convened two retreats on the budget – this report is a summary of those retreats.

Late last year, on Dec. 4, 2010, the Ann Arbor city council held the first of two budget retreats for the next year’s budget adoption process. The current 2011 fiscal year ends on June 30, 2011, and the council will need to finalize its FY 2012 budget in May. The council typically begins contemplating the next fiscal year’s budget at a retreat near the end of the calendar year.

Two days after the first retreat, at the Dec. 6 regular city council meeting, city administrator Roger Fraser and councilmembers recapped the event, with Stephen Rapundalo (Ward 2) describing it as the best retreat discussion on the budget since he’s been on the council. First elected to the council in 2005, Rapundalo has five previous budget seasons to compare against.

The December retreat agenda reflected two main items: (1) general economic conditions; and (2) a sustainable service delivery model. The grim condition of the state’s economy was a point that was also driven home by Kirk Profit – director of Governmental Consultant Services, the city’s lobbyist in Lansing – in a presentation to the council at their Dec. 6 regular meeting.

The second retreat, on Jan. 8, followed up with a focus on services. To prepare for the retreat, councilmembers had ranked various city services by priority.

At both retreats, councilmembers and staff took the opportunity to communicate a message to city labor unions, some of whom Rapundalo characterized as not yet having seen fit to “recognize economic reality.”

And as chair of the council’s labor committee, Rapundalo has said he’ll give updates at the council’s regular meetings on the status of labor negotiations. He started the updates at the council’s Jan. 20 meeting. The implicit message communicated by the first update: Ann Arbor’s labor unions aren’t making the kind of concessions they should reasonably make, given economic conditions.

This report features highlights of the discussion from both retreats – including issues like the city’s approach to fire and police protection, solid waste and composting, as well as possible replacement of the general fund operating millage with a city income tax.

At both retreats, city administrator Roger Fraser and key city staff did their best to frame the council’s conversation not as a question of what services to cut. Instead, they tried to get councilmembers to consider which services might be delivered in a different way. The sustainability of the service delivery model depends on how the city delivers those services to residents – ranging from employment of full-time city workers, outsourcing the work, or by not offering the service at all.

To frame the context of these comparatively brief retreat highlights, we first offer a look back to 1936, when the city delivered a sidewalk snowplowing service to its residents. How? Partly by hiring in teams of horses to do the job. [Full Story]

On Monday, May 17, the Ann Arbor city council will deliberate on the city budget and adopt it with any amendments they agree to make. If they fail to reach agreement on amendments, the city budget proposed by city administrator Roger Fraser will be adopted “as is,” as stipulated in the city charter.

Among the amendments that will be brought forward is one that calls for fewer layoffs in the police and fire departments. Instead of eliminating 35 total safety services positions, the amendment would eliminate five firefighters.

The police and fire positions would be maintained through a combination of extra revenue items. One of those is the Ann Arbor Downtown Development Authority’s $2 million payment to the city, which the DDA board approved on May 5.

A second additional revenue item is simply a more optimistic assessment of the prospects that state revenue sharing will remain at current levels next year. The third major additional revenue item comes from increased revenue from parking fines, which the council will also vote on at its Monday meeting. The projected increases in parking fine revenue had not been included in the budget proposed in April by Fraser.

Another budget amendment would tap the additional revenues to maintain human services funding at last year’s levels – right now, there’s a cut in human services amounting to $260,000 in the proposed budget.

The additional revenues would also be used to fund another budget amendment, which would eliminate the proposed football Saturday parking in Allmendinger and Frisinger parks, plus make the mowing cycles in parks more frequent than they would be in the currently proposed budget.

Other amendments that might be brought forward would make changes that would decrease revenue, compared to what is currently proposed, by (i) eliminating an increase in contractor registration fees, (ii) eliminating an increase in rental housing inspection fees, and (iii) reducing the general fund tax administration fee from its current maximum of 1%. A final amendment that might be proposed would eliminate the proposed loading zone permit program, replacing it with increased fines for parking in loading zones, for a small net gain in revenue. [Full Story]

Ann Arbor City Council meeting (Sept. 21, 2009): Ann Arbor’s city council approved both major development projects on its agenda, one of them enthusiastically, the other only reluctantly.

Although there was a smattering of opposition expressed to the Near North affordable housing development during the public hearing on the matter, the 39-unit project on North Main Street ultimately won the support of its closest neighbors. That support was reflected symbolically when developer Bill Godfrey and neighbor Tom Fitzsimmons stood side-by-side at the podium as they each addressed the council, which gave the project its unanimous approval.

The “matter of right” City Place project proposed for the block of South Fifth Avenue just south of William was also unanimously approved by the council, but councilmembers took turns criticizing both the project and the developer, Alex de Parry. The council had previously established a historic district study committee and enacted an associated moratorium on demolition and work in the area where the proposed project is located. Carsten Hohnke (Ward 5) compared de Parry’s decision to bring the project forward despite the moratorium to “stamping feet, being upset you didn’t get what you wanted.”

Many members of the audience held yellow 8×11 paper signs calling on councilmembers to support a resolution that would have released council emails sent during their meetings dating back to 2002. However, council rejected that resolution except for a resolved clause that would in the future provide the public with copies of electronic communications among councilmembers during its meetings – by appending them to the official minutes of the meeting that are eventually posted on the city’s website.

The council also put looming financial issues on the radar by passing a resolution that opposes a recent Michigan budget proposal that would cut state shared revenues to the city of Ann Arbor by about $1.2 million. At the council’s budget and labor committee meeting that was held Monday – before the regular council meeting – Tom Crawford, the city’s chief financial officer, floated some possible ideas for meeting that shortfall. [Full Story]

At Monday night’s city council work session, councilmembers heard news from their Lansing lobbying team that had a $260,000 negative impact on the Ann Arbor city budget for FY 2010, which they are expected to adopt next Monday, May 18. The quarter-million dollar shortfall against the city’s own budget planning estimates for state shared revenue led to discussion of the possibility of accelerating an already-planned reduction in the number of Ann Arbor firefighters. A reduction of 14 positions in the fire department could be implemented in early 2010, instead of sometime during FY 2011, which was originally planned.

At the work session, city administrator Roger Fraser and the city’s chief financial officer, Tom Crawford, indicated that their preferred strategy was not to build any firefighter layoffs into the FY 2010 budget – they wanted to see if they could squeeze the $260,000 out of the budget in the course the first part of the FY 2010, which for the city begins July 2009. There’s uncertainty still, said Fraser, about how many police officers will take advantage of the early retirement offer – a move the city is making to avoid laying off 27 officers for FY 2010. Officers have until mid-June to make a decision. That uncertainty factors into decisions on the FY 2010 budget that council will make on  May 18.

Councilmembers took turns calling city staff to the podium to clarify questions on other topics of interest. That included parking meters – their possible installation in residential areas, as well as the feasibility of maintaining current levels of ticket revenues without as many community standards enforcement officers dedicated specifically to ticketing. Other topics included the Local Development Finance Authority (questions about angels), historic district consultant (likely to be cut in FY 2010, instead of waiting until FY 2011), Project Grow (fund balance seen as too high) and the civic band (has not requested funding). The East Stadium bridges question came up, too (no money from state, but possibly from feds).

No formal decisions were made at the work session. [Full Story]